Mining Weekly

BRAKPAN (miningweekly.com) – By taking material that has been dumped as waste and turning it into gold, DRDGold is adding R14-billion worth of value a year to the South African economy and unlocking scarce real estate for gainful development, a visiting media contingent heard on Thursday.

“[That is] R14-billion rands worth of economic activity taking place in South Africa as a consequence of DRDGold taking material that has been thrown away and putting it through a process,” DRDGold CEO Niël Pretorius said of the debt-free gold producer that has seen its market capitalisation soar from R700-million in October last year to R4.9-billion earlier this year. (Also watch attached Creamer Media video).

The oldest company listed on the Johannesburg Stock Exchange recovers gold from a large 11.8-million-ounce surface tailings resource that built up in and around Johannesburg for more than a century.

As it uses advanced technology to recoup increasing proportions of gold from waste that has less than a third of a gramme of gold for every tonne of the stuff, it is mulling plans to generate its own electricity to take the plant above its already high 95% availability.

Targeted is a volume throughput of two-million tonnes of material a month to produce between 145 000 oz and 150 000 oz of gold a year.

“It’s all in the volume throughput and that’s where we want to make sure that we put proper systems in place to manage throughput risk,” Pretorius told the media conference in which Mining Weekly Online participated.

High pressure water hoses slurrify the slime or sand so that it can be pumped along three pipelines, with two-thirds of the Ergo plant’s waste material arising from the East Rand and a third from Johannesburg’s Crown and City complexes.

The company has also taken the burden off scarce potable water by using eight megalitres of treated sewage water a day from a R22-million filtration plant, operated by the East Rand Water Care Company.

It requires large quantities of water to mine, pump and process the tailings, which is why it also has a contract with government water organisation Trans-Caledon Tunnel Authority (TCTA) to source up to 30 megalitres of treated acid mine drainage (AMD) water a day from the TCTA’s AMD treatment facility at the defunct East Rand Proprietary Mine’s old south west vertical shaft, in Germiston, which uses lime and limestone to neutralise the acidic water and precipitate the heavy metals.

Considerable light industrial development is taking place on the sites freed of mine tailings, with 225 ha being made available this year.

GOLD PRICE

DRDGold finds itself in a sweet spot in being able to sell its gold into rising dollar gold prices and pay for its relatively flat operational costs in weakened local currency. This is resulting in the generation of increased free cash off its debt-free base.

World happenings are causing the gold price to rise. Confidence in governments as credible sources of capital is diminishing and many are buying gold to preserve capital.

“We’ve been playing with gold so recklessly in the global markets … that I think we might be heading towards a deficit in so far as physical gold is concerned,” Pretorius commented.

FAR LESS LABOUR INTENSITY

A knowledge-based labour force works in a relatively noiseless environment. Only four people at any given point run Ergo’s flotation and the new fine grind circuit with the major focus being on keeping ultrafine recovery grades consistent.

An investment of R650-million into putting this flotation fine grind technology on an even keel has put new swagger into this dividend-paying company, which looks set to continue upping its game as it rides the crest of the new gold wave.